“We are very impressed with Elan's ability to be transparent in providing best-in-class support for both employees and members,” said Allan Stevens, FMFCU vice president. “We look forward to using Elan's in-branch promotions and incentives, which we think will be key factors in communicating the member value associated with these card products.”

The switch is notable for several reasons, not least the amount of time Franklin had with FIA.

Franklin Mint sold its card portfolio to MBNA in 2005 just before Bank of America purchased MBNA and turned it into FIA Card Services. At that time, the credit union expressed confidence in the firm and said it would not attempt to change its contract even though Bank of America, not MBNA, was going to be its issuing partner.

But the Bank of America's relationship was never a perfect fit for the CU, although Franklin Mint was pleased with the relationship overall, according to Stevens.

He did not go into detail about the ways the FIA relationship did not fit as well as it might, but the giant card issuer signaled early on that it was not as interested in agent card-issuing relationships with small- and medium-sized credit unions as MBNA had been. At one point, FIA executives confirmed that the large card issuer was not going to buy credit union card portfolios below a certain size, largely on the grounds they were not big enough to justify the conversion costs.

Stevens explained that Franklin Mint had been looking at Elan as a potential issuing partner as part of its process to consider renewing the contract with FIA. “We sold the portfolio in 2005, so our contract was coming up this year,” Stevens said. “We had considered Elan a little bit when we had been looking at the first sale but then gave them a second, closer look this time after we heard good things about Elan,” he added.

But the decision had become clearer after FIA told Franklin Mint that it would not be interested in acquiring a 1,700-card portfolio that Franklin Mint had taken on when it merged a smaller CU, Stevens explained. FIA's refusal to take on the 1,700 cards when it already had between 8,000 and 9,000 cards helped the CU better understand the relationship.

“We concluded that FIA was really a better fit for us,” Stevens said.

The Franklin move caps what observers have called a mini-trend among some CUs that wind up either going back into card issuing or switching their agent issuing partner at the end of their contracted period.

The number of credit unions who leave their first agent partner is small but not a fluke, according to one card industry executive. “It's definitely a minority, but it's a persistent minority” among credit unions that sold their cards to agent issuers, said an executive familiar with the industry. The executive declined to be quoted by name to protect relationships with both credit unions and card issuers.

Further, the reasons a credit union and an issuer might split are as varied as a shift in business models over the last five years, a change in leadership on the part of the CU or the agent issuer or any number of problems, the executive said.

Another card issuing executive observed that it seemed like Bank of America might be getting out of agent issuing with credit unions, a suggestion that Bank of America spokesman Betty Reese denied. “We are definitely interested in working with credit unions and remain committed to our credit union partnerships,” Reese said, while declining to comment on the Franklin Mint Credit Union move.

But another credit card industry executive who declined to be named because he was not authorized to talk to the press said he perceived some “drift” at FIA when it comes to contract renewals. If a credit union agent-issuing contract was allowed to roll over, FIA was fine with that, the executive commented. But if there was a problem or a major change needed, Bank of America might let the contract go.

Willie Koo, CEO of Asset Exchange, a credit union card consultant and brokerage that is a subsidiary of card processor FIS, declined to speak to the Franklin Mint decision but expressed no surprise that it had decided to switch.

Koo said that the firm, so far, had identified 22 credit unions that had sold their card portfolios in 2005 that had gone back into card issuing. Of those 22, he said, 17 declined to renew their agent-issuing agreements and had returned to card issuing.

Koo estimated that the numbers may continue to rise as well. Many of the credit unions that sold their card portfolios did so between 2005 and 2007 and any of those contracts will come up for renewal in the next year to 18 months, Koo observed.

“Credit unions owe it to themselves and their members to pull those contracts down from the shelf and take a good look at them,” Koo said. “Don't wait until the last month when you get a letter from the issuing partner that said the contract will roll over in another month.”